Local solar company to repay tax abatements after halving workforce

A dispute in front of the International Trade Commission may prove to be a boon for domestic solar producers that have struggled to compete with cheap foreign suppliers.

A dispute in front of the International Trade Commission may prove to be a boon for domestic solar producers that have struggled to compete with cheap foreign suppliers.

Photo: San Antonio Express-News File Photo

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File photo of Mission Solar employees in a testing area at its Brooks City Base location. Mission Solar is laying off 170 more workers, after cutting 87 jobs in October.

File photo of Mission Solar employees in a testing area at its Brooks City Base location. Mission Solar is laying off 170 more workers, after cutting 87 jobs in October.

Photo: TOM REEL /

Local solar company to repay tax abatements after halving workforce

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San Antonio-based solar company Mission Solar has cut 257 employees in two rounds of layoffs since October and will have to repay some local tax abatements it was awarded in a 2013 deal with city and county leaders to create jobs here.

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The latest round of cuts — 170 layoffs announced Friday — come as the company shifts its focus from utility projects, which required large-scale production for multimegawatt systems, to residential projects, which tend to be smaller in scale.

The reduced head count breaks a pledge the company made to the city in 2013 to create and maintain 404 full-time jobs through 2023 in exchange for reduced taxes.

The first round of layoffs, last fall, cost 87 workers their jobs as the company cut its solar cell production line, citing competition from Asian suppliers that undercut the more expensive manufacturing process in the U.S. The company, which had 381 employees before the October cuts, will keep just 124 workers at its plant at Brooks City Base.

The city of San Antonio is terminating its tax abatement agreement with Mission Solar as a result. The company will repay $601,000 — 100 percent of its original tax savings — to the city over the next two years, according to the city’s economic development director, Rene Dominguez. The agreement was part of a deal Mission Solar inherited when OCI Solar Power bought out another solar company, Nexolon America, to form Mission Solar.

“It’s a pretty volatile industry, so we’re pleased to see that they’re continuing to operate in San Antonio under this new model, and we remain committed, along with CPS (Energy), to continue to work with them as they change their business model,” Dominguez said.

He likened the changing market conditions to the Eagle Ford Shale, where collapsing oil prices in 2015 and early 2016 led to drastic cutbacks in investment and production.

Bexar County Judge Nelson Wolff said the county is working to figure out how much Mission Solar will need to repay, adding that the company will likely be able to keep a portion of that money because it still has employees here.

He said it’s “very seldom” that the county has to claw back money from tax abatement agreements.

Bexar County commissioners gave Mission Solar a 10-year tax abatement worth $947,000 in 2013, the San Antonio Express-News has reported. In addition, the city gave the company a 10-year, $5 million lease for a property worth

$17 million that it has since purchased.

“It’s sad that they’re not able to keep going at the level that they were. I guess they misjudged the market when they jumped into it,” Wolff said of Mission Solar.

The company has been one of the largest players in CPS Energy’s New Energy Economy initiative, which seeks to bring 1,000 renewable-energy industry jobs to San Antonio. Mission Solar continues to be the largest employer, even with just 124 employees. German-based solar inverter manufacturer KACO has at least 75 employees in San Antonio. That company came here in 2014.

CPS Energy spokesman Paul Flaningan said San Antonio has already gained $1.4 billion in economic effects from renewable companies and that “solar is just a part of it.”

“We are continuing to work with all of our New Energy Economy partners to find additional opportunities to bring jobs and to continue to bring this economic development engine that we believe is going to be a critical component of San Antonio’s future,” Flaningan said.